Conservation Payments, Liquidity Constraints and Off-Farm Labor: Impact of the Grain for Green Program on Rural Households in China

seedling planted and free seedlings in the initial year.³ By the end of 2004, officials had expanded the
program to some eight million hectares of cultivated land, involving approximately 15 million farmers
in more than 2,000 counties in 25 provinces in China (State Environmental Protection Administration,
2005, Xu, et al., 2006).

More than five years into the program, however, it is not yet clear how Grain for Green has
affected how farmers allocate labor across income-generating activities. On one hand, the government
explicitly states that poverty alleviation and restructuring of agricultural production into a more
environmentally and economically sustainable set of activities are program goals (State Forestry
Administration, 2003). Therefore, the government clearly has an expectation that the program will
facilitate a shift in labor from low-profit grain production to production of more profitable crops and of
livestock and, more importantly, from primarily on-farm work to greater off-farm work. On the other
hand, off-farm activities, including self-employment and wage income, both in local job markets and in
migrant labor markets, have been a driving force in reducing poverty in rural China (Bowlus and Sicular,
2003, deBrauw, 2002, Meyer, et al., 1995 ). Given this recent trend, households in rural China may have
been increasing their participation in off-farm activities even when they were not enrolled in the Grain
for Green program. The results of empirical studies on the extent of the program’s labor impact are
mixed: two studies of the Grain for Green program used data collected two years after the program
began and found that the program had no impact on off-farm incomes or on off-farm labor participation
(Uchida, et al., forthcoming, Xu, et al., 2004). A study involving data collected four years into the
program found a positive effect on off-farm labor participation (Groom, et al., 2006).⁴

<<   2   3   4   5   6   7   8   >>

More intriguing information